I just received the official announcement from Oregon Entrepreneurs Network (OEN) naming the winner of the Angel Oregon competition. [Update: Who won the elevator pitch competition? Steve Morris has your answer over on Oregon Startups.]
And unfortunately, for me, the winner is an apparel company. (Upside? They have a blog.)
Well, that doesn’t really fit the Web startup flavor of Silicon Florist, so I’m going to cover the runners-up, instead. Because, honestly, these two finalists have the most potential of becoming regulars here on the Silicon Florist:
- OsoEco, the first online community that allows consumers to shop and research green products and services with friends, interests groups and consumers
- Revelation, a software company that optimizes qualitative market research, enabling companies to develop and harness rich understanding of customer experiences, behaviors and needs at a fraction of the time and cost of traditional research techniques
OsoEco and Revelation each received $57,500 investment awards for winning the Sustainability Investment and Technology/Biotech tracks, respectively.
“The entrepreneurs participation in the investor presentation coaching and exhaustive due diligence process really helped them to articulate their business plan and demonstrate the potential return for investors,” said, Bob Ward, Angel Oregon chair. “Angel Oregon is attracting really high caliber companies. Couple that with value of the exposure and the experience that competing companies get, and the value proposition of the event is pretty compelling for Oregon’s economy.”
For more information on the Angel Oregon program, visit OEN.
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[…] to report that Eugene-based OsoEco—a site focused on socially responsible shopping that was in the running to win Angel Oregon last year—has announced it is closing its doors and shutting down its site at the end of this […]
[…] to report that Eugene-based OsoEco—a site focused on socially responsible shopping that was in the running to win Angel Oregon last year—has announced it is closing its doors and shutting down its site at the end of this […]
[…] 2007, an architectural software company walked away with the prize. In 2008, it was an apparel company. Could this be the year that a Silicon Forest Web company takes the big prize? I don’t know. […]
[…] 2007, an architectural software company walked away with the prize. In 2008, it was an apparel company. Could this be the year that a Silicon Forest Web company takes the big prize? I don’t know. […]
[…] Cummings, CEO of OsoEco—whom you may remember from this year’s Angel Oregon—started the Smart-ups group. She talked to Eugene’s The Register-Guard about the […]
[…] End//Outdoor, a sustainable footwear play, won the grand prize of a $150,000 investment. Osoeco and Revelation both won investments of $57,500. The three track system encouraged a more focused evaluation of the companies and created a wider expectation of the types of companies that would be funded. This new system should put to rest the thoughts that Angel Oregon only looks at Tech companies. […]
Steve & Steve-
I’ll echo Rick’s comment above, thank you for the insight. I’m always glad to learn more 🙂
And congrats, Steve A. for your win!
I can’t tell you how much I appreciate this conversation–and clarification–on Angel Oregon and Angel investments in general.
Thank you, all, for taking the time to comment and continue this conversation.
As one of this year’s category winners (Revelation), I can vouch that Steve Morris has it right in explaining how these things tend to work. It is an _investment_ award, meaning that it is not a grant or gift. The $$ award is actually just part of the benefit. Because the amounts of the awards themselves are not generally enough to complete a round of funding, the biggest benefit is the validation it gives a company for other investors. One of the most difficult things about the funding process is getting that first investor to jump in. Winning (or even being a finalist) at an event like Angel Oregon offers a company a good amount of validation that can get the ball rolling for others to jump in.
I agree with the Ryan Williams post Rick mentioned — a “convertible note” is very standard (and a 12 month term is very typical).
And it’s actually a very good financing approach for a startup for at least 3 reasons:
1. The alternative to a convertible note is to sell stock — and to sell stock you have to agree with the investor on a valuation for your company. A convertible note, on the other hand, basically says “I’ll accept the valuation of the VC-led investment that I expect to happen in the next 12 months”. In that 12 months, the valuation is likely to go up (because the company has more time to accomplish more milestones) which means the convertible note buys less of the company (a good thing for the company…)
2. The fact that the convertible note is in place will make it easier for these companies to find other investors to fill-out the round (i.e., the fact that the Angel Oregon due diligence was a thumbs-up is a good thing.) I’m tempted to talk about lemmings, but I’ll resist.
3. The 12 months terms is almost a non-issue. The Angel Oregon investment group has zero motivation to “call” the loan. If it takes a bit longer to put together a VC round (so the loan can convert to stock) there’s a lot of motivation to be patient. After all, the investment group knows that the receiving company does not have the cash to repay the loan. What the group really wants is stock. They’ll wait for it if they have too.
[…] OEN announces the winner of Angel Oregon (and it’s not a tech company) […]
Totally get your “It’s not really a prize” stance. I think the “prize” is not so much the investment as it is the unique opportunity to get in front of folks to tell a story, without some of the “old boys network” navigation that it takes to get to that point.
The prize is the shorter journey, not the investment.
okay, so guess it’s more of an opinion of mine. I honestly don’t know much about Angel so I am probably off base. It is really the 12 month thing that bugs me.
I just don’t see the “prize” in all of this.
I again put out my call to former winners of OEN angel funds and ask for them to chime in and give us the insider point of view.
I thought your question was addressed in the comment by Ryan Williams here:
http://siliconflorist.com/2007/12/12/oen-says-every-time-a-bell-rings-an-angel-looks-to-fund-a-startup/
But if not, I believe this is the standard situation with ANY Angel funding, not just Angel Oregon. At least, that’s what I read in Wikipedia. And I believe everything I read there.
http://en.wikipedia.org/wiki/Angel_investor
Congrats to EndOutdoor…being a footwear/apparel startup is a tough business and they can use any help they can get.
Revelation looks interesting…I’ll be following them.
I want to revisit an issue I posed on this blog a few months back. Does anyone really consider the investment from an AO win to be a prize?
The investment is not a gift, it is a LOAN.
The loan matures in 12 months with an interest rate of 10%.
However it is convertable so the loan holder has the option to convert into equity at the end of 12 months.
So what does everyone think…good deal?
EndOutdoor better hope that the OEN decides to convert, otherwise they have a LARGE check to write in March of 2009.